USDA Agricultural Projections to 2030

USDA Agricultural

United States Projections to 2030

Department of Agriculture

Office of the Chief Economist

World Agricultural Outlook Board

Long-Term Projections Report OCE-2021-1

February 2021

Interagency Agricultural Projections Committee

World Agricultural Outlook Board, Chair Economic Research Service Farm Production and Conservation Business Center Foreign Agricultural Service Agricultural Marketing Service Office of the Chief Economist Office of Budget and Program Analysis Risk Management Agency Natural Resources Conservation Service National Institute of Food and Agriculture

USDA Long-Term Projections

USDA Agricultural Projections to 2030. Office of the Chief Economist, World Agricultural Outlook Board, U.S. Department of Agriculture. Prepared by the Interagency Agricultural Projections Committee. Long-term Projections Report OCE-2021-1, 103 pp.

Abstract

This report provides projections for the agricultural sector to 2030. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income. The projections are based on specific assumptions, including a consensus macroeconomic scenario, existing U.S. policy, and current international agreements. The Agriculture Improvement Act of 2018 is assumed to remain in effect through the projection period. The projections are one representative scenario for the agricultural sector and reflect a composite of model results and judgment-based analyses. The projections in this report were prepared using data through the October 2020 World Agricultural Supply and Demand Estimates (WASDE) report, except where noted otherwise.

Keywords: Projections, crops, livestock, biofuel, ethanol, biodiesel, U.S. dollar, crude oil, trade, farm income, U.S. Department of Agriculture, USDA.

Acknowledgments and Contacts

The report coordinators, on behalf of the Interagency Agricultural Projections Committee, thank the many analysts in different agencies of USDA for their contributions to the longterm projections analysis and to the preparation and review of this report. Without their help, this report would not be possible. Questions regarding these projections may be directed to:

Erik Dohlman, Economic Research Service, Market and Trade Economics Division James Hansen, Economic Research Service, Market and Trade Economics Division David Boussios, Office of the Chief Economist, World Agricultural Outlook Board

Use of commercial and trade names does not imply approval or constitute endorsement by USDA.

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident. Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at How to File a Program Discrimination Complaint and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, SW, Washington, D.C. 20250-9410; (2) fax: (202) 690-7442; or (3) email: program.intake@. USDA is an equal opportunity provider, employer, and lender.

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USDA Long-Term Projections: Background

USDA's long-term agricultural projections presented in this report are a departmental consensus on a conditional long-run scenario for the agricultural sector. These projections provide a starting point for discussion of alternative outcomes for the sector.

The projections, colloquially referred to as the baseline projections, were prepared using data available through the October 2020 World Agricultural Supply and Demand Estimates (WASDE) report, except where noted. The Agriculture Improvement Act of 2018 is assumed to remain in effect through the projection period. The scenario presented in this report is not a USDA forecast about the future. Instead, it is a conditional, long-run scenario about what would be expected under the continuation of current farm legislation and other specific assumptions.

Critical long-term assumptions are made for U.S. and international macroeconomic conditions, U.S. and foreign agricultural and trade policies, and growth rates of agricultural productivity in the United States and abroad. The report assumes that there are no domestic or external shocks during the projection period that would affect global agricultural supply and demand. Changes in any of these assumptions can significantly affect the projections, and actual conditions that emerge will alter the outcomes.

The projections only include policies in place or are already expected to be implemented as of October 2020. Recent trade deals or negotiations such as the Phase One deal with China, the United States-Mexico-Canada (USMCA) agreement, and a Japan-U.S. free trade agreement were considered for these projections. The macroeconomic assumptions were completed in August 2020. Support payment programs to assist producers directly affected by the coronavirus pandemic in 2020 announced after the projections was developed, such as those under the Consolidated Appropriations Act 2021, are not included in the calculations here.

The projections analysis was conducted by interagency committees in USDA and reflect a composite of model results and judgment-based analyses. The Economic Research Service had the lead role in preparing the departmental report. The projections and the report were reviewed and cleared by the Interagency Agricultural Projections Committee, chaired by the World Agricultural Outlook Board. USDA participants in the projections analysis and review include the World Agricultural Outlook Board, the Economic Research Service, the Farm Production and Conservation Business Center, the Foreign Agricultural Service, the Agricultural Marketing Service, the Office of the Chief Economist, the Office of Budget and Program Analysis, the Risk Management Agency, the Natural Resources Conservation Service, and the National Institute of Food and Agriculture.

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Table Contents

Abstract .......................................................................................................................................i Acknowledgments and Contacts.............................................................................................i

USDA Long-Term Projections: Background .............................................................................ii List of Figures ........................................................................................................................ iii List of Tables .........................................................................................................................iv

Introduction and Projections Overview .................................................................................... 1 General Policy Assumptions ................................................................................................. 2 Biofuel Assumptions.............................................................................................................. 3 Macroeconomic Assumptions ............................................................................................... 5

U.S. Crops, Livestock, and Farm Income Projections........................................................... 18 U.S. Crops ........................................................................................................................... 18 U.S. Livestock...................................................................................................................... 39 Breakout Box: U.S. Agricultural Trade Projections ............................................................ 48 U.S. Farm Income ............................................................................................................... 51

Agricultural Trade ................................................................................................................... 56 World trade overview........................................................................................................... 56 International Projection Highlights ...................................................................................... 57 Breakout Box: China's Imports Surged in 2020 ................................................................. 59 Breakout Box: Effects of COVID-19 on Global Agricultural Trade..................................... 60

List of Figures

Figure 1. Real gross domestic product growth by global region, 2000-30 ............................. 6 Figure 2. U.S. and world real gross domestic product growth, 2000-30................................. 7 Figure 3. Japan, Eurozone, and Canada real gross domestic product growth, 2000-30 ....... 8 Figure 4. Real gross domestic product growth by developed and developing country regions, 2011-30....................................................................................................................... 9 Figure 5. Agricultural trade-weighted U.S. dollar exchange rate, 2000-30........................... 11 Figure 6. Crude oil price: refiner's acquisition cost of imports (RACI), 2000-30................... 12 Figure 7. World population growth rates, 2001-30 ................................................................ 13 Figure 8. Corn, soybean, and wheat price, 2000-30 ............................................................. 18 Figure 9. Planted area for the eight major row crops, 2000-30............................................. 19 Figure 10. Conservation Reserve Program, 2000-30............................................................ 20 Figure 11. U.S. corn feed and residual use, ethanol, and exports, 2000-30 ........................ 21 Figure 12. U.S. wheat domestic use and exports, 2000-30 .................................................. 22 Figure 13. U.S. soybean domestic use and exports, 2000-30 .............................................. 23 Figure 14. U.S. rice domestic and residual use and exports, 2000-30 ................................. 24 Figure 15. U.S. upland cotton domestic mill use and exports, 2000-30 ............................... 25 Figure 16. U.S. sugar domestic deliveries, production, and imports, 2000-30 ..................... 26 Figure 17. Farm value of U.S. fruit, nut, and vegetable production, 2000-30....................... 27 Figure 18. U.S. animal product production, 2000-30............................................................. 39 Figure 19. U.S. per capita meat disappearance, 2000-30 .................................................... 40 Figure 20. U.S nominal livestock prices, 2000-30 ................................................................. 41 Figure 21. U.S. meat exports, 2000-30.................................................................................. 42 Figure 22. U.S. milk production, 2000-30 .............................................................................. 43 Figure 23. U.S. agricultural trade long-term projections........................................................ 48

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Figure 24. Projected U.S. agricultural exports by commodity group..................................... 49 Figure 25. Projected U.S. agricultural imports by commodity group..................................... 49 Figure 26. U.S. farm income indicators, 2000-30 .................................................................. 51 Figure 27. U.S. total gross income, 2000-30 ......................................................................... 52 Figure 28. U.S. cash receipts, 2000-30 ................................................................................. 52 Figure 29. Total U.S. direct government payments, 2000-30 ............................................... 53 Figure 30. U.S. farm expenses, 2000-30 ............................................................................... 54 Figure 31. Global trade: wheat, coarse grain, soybeans, and soybean products, 2000-30. 56 Figure 32. U.S. agricultural export values per month, 2015-20 ............................................ 61 Figure 33. U.S. agricultural export totals, 2015-20 ................................................................ 62 Figure 34. Global coarse grain imports.................................................................................. 63 Figure 35. Global corn exports ............................................................................................... 64 Figure 36. Global sorghum imports........................................................................................ 65 Figure 37. Global barley imports ............................................................................................ 66 Figure 38. Global barley exports ............................................................................................ 67 Figure 39. Global wheat imports ............................................................................................ 68 Figure 40. Global wheat exports ............................................................................................ 69 Figure 41. Global rice imports ................................................................................................ 70 Figure 42. Global rice exports ................................................................................................ 71 Figure 43. Global soybean imports ........................................................................................ 72 Figure 44. Global soybean exports ........................................................................................ 73 Figure 45. Global soybean meal imports ............................................................................... 74 Figure 46. Global soybean meal exports ............................................................................... 75 Figure 47. Global soybean oil imports ................................................................................... 76 Figure 48. Global soybean oil exports ................................................................................... 77 Figure 49. Global cotton imports ............................................................................................ 78 Figure 50. Global cotton exports ............................................................................................ 79 Figure 51. Global meat exports .............................................................................................. 80 Figure 52. Global beef imports ............................................................................................... 81 Figure 53. Global pork imports ............................................................................................... 82 Figure 54. Global poultry imports ........................................................................................... 83

List of Tables

Table 1. Global real GDP growth assumptions ......................................................................14 Table 2. U.S. macroeconomic assumptions...........................................................................15 Table 3. Real exchange rate growth rates assumptions ........................................................16 Table 4. Population growth assumptions ...............................................................................17 Table 5. Acreage for major field crops and Conservation Reserve Program assumptions .....29 Table 6. U.S. corn long-term projections................................................................................30 Table 7. U.S. sorghum long-term projections.........................................................................30 Table 8. U.S. barley long-term projections.............................................................................30 Table 9. U.S. oats long-term projections................................................................................31 Table 10. U.S. wheat long-term projections .............................................................................32 Table 11. U.S. soybeans and products, long-term projections .................................................33 Table 12. U.S. rice long-term projections, total rice, rough basis .............................................34 Table 13. U.S. rice long-term projections, long-grain rice, rough basis ....................................35 Table 14. U.S. rice long-term projections, medium- and short-grain rice, rough basis..............36 Table 15. U.S. upland cotton long-term projections .................................................................36 Table 16. U.S. sugar long-term projections..............................................................................37

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